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United Kingdom
United Kingdom
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Mudarib meaning
Published by a LexisNexis Banking & Finance expert
What does Mudarib mean?
The mudarib is the investment manager or agent appointed under a mudaraba (a Sharia-compliant profit‑sharing contract) to deploy capital provided by the rabb al-mal (capital provider). The mudarib contributes management and expertise rather than capital, invests within an agreed mandate, and is paid by a pre‑agreed share of profits; it typically recovers reasonable expenses but is not owed a fixed return. Financial losses (absent breach) are borne by the rabb al‑mal, while the mudarib bears loss of time and may forfeit profit if in breach. The mudarib must not guarantee capital or profit, must avoid negligence, breach of mandate or wilful misconduct, and may appoint a sub‑mudarib only if permitted.
In the UK and Ireland the term is not defined by statute or case law; it is a descriptive Islamic finance term used in documentation governed by English law, Scots law or Irish law, and construed under general contract and agency principles with Sharia concepts reflected in the agreed terms. Usage is broadly consistent across England & Wales, Scotland, Northern Ireland and Ireland. Common applications include Islamic investment funds, two‑tier bank deposit structures, trade and project finance, and certain sukuk arrangements.
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View the related Practice Notes about Mudarib
PRACTICE NOTES
UK Banking, Finance, Capital Markets, Derivatives and Insolvency Law Glossary including Islamic finance
Banking & Finance glossary A Auditing and Accounting Organisation for Islamic Financial Institutions (AAOIFI) The foremost Islamic, international, autonomous, independent, not-for-profit corporate body that develops and issues accounting, auditing, governance, ethics and Shari’ah benchmarks and standards for Islamic Financial Institutions (IFIs) and the wider Islamic finance sector. Founded in Bahrain in 1991, it is backed by a number of institutional members across more than 45 countries, including central banks and regulatory authorities, financial institutions, accounting and auditing practices, and legal firms. Its pronouncements are currently applied by leading Islamic financial institutions across the world and have advanced a progressive and gradual harmonisation of global Islamic finance practice. It also delivers professional qualification programmes—notably Certified Islamic Professional Accountant (CIPA), Certified Shari’ah Adviser and Auditor (CSAA), and the corporate compliance programme—in efforts to strengthen the industry’s human capital and governance frameworks. For further details, see Practice Note: Key participants in the Islamic finance industry—Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). Acceleration Acceleration is the formal action...
22 May
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